Periodic Review Inventory Systems with Continuous Demand and Discrete Order Sizes

We study a single product inventory system with nonnegative setup cost in which the demand is a continuous random variable but orders are restricted to be integer valued. Optimal policies, when there are no setup costs, have a nice form. However, we show that, when the setup costs are nonzero, optimal policies may have a very counterintuitive form without any particular structure. We obtain a bound for the increase in costs resulting from the restriction of orders to be integers and define a suboptimal policy whose performance is within that bound.

• 저널Management Science · 30(10) · 1250–1254
• 토픽Supply Chain and Inventory Management · Management Information Systems
• DOI10.1287/mnsc.30.10.1250
• 저자John N. Tsitsiklis